Egypt | Transparency Snapshot

Backed by the nation’s military apparatus, former President Hosni Mubarak ruled the Arab Republic of Egypt in a continuous state of emergency from 1981 to 2011. Since mass pro-democracy demonstrations forced Mubarak’s resignation in February 2011, control of the country has passed to the Supreme Council for the Armed Forces. But Egypt remains in turmoil as it attempts to transition to a more inclusive political system. This ongoing transition is an opportunity for leaders to increase transparency and reduce government corruption, despite the obvious challenges to reform efforts amid instability.

The election of 16-17 June 2012 ran smoothly according to all international observers present in the country. Mohammad Morsi of the Muslim Brotherhood was elected president, defeating Ahmad Shafiq. One of Morsi's early decisions was to restore the parliament after the Supreme Court dissolved it in June 2012. New parliamentary elections are expected to take place in late 2012.

On 24 July 2012, President Morsi designated the former Irrigation and Water Resources Minister Hisham Kandil as prime minister despite concerns the little-known technocrat may not have the political or economic experience needed for the job. The new cabinet has 35 members, with two

The legitimacy of the Constituent Assembly, which is tasked with the creation of the new constitution, remains in question after Cairo's administrative court postponed the case examining the legality of the formation of the governing body until September 2012.Muslim Brotherhood ministers. The ministers of defense, finance and foreign affairs kept their posts.

In the years prior to his resignation, Mubarak had made some efforts to stem corruption and increase transparency, including a 2002-2003 anti-corruption campaign and the establishment of a government human rights council and a fairly robust bureaucratic anti-corruption apparatus. In 2005, Egypt ratified the U.N. Convention Against Corruption. Despite these efforts, anti-corruption agencies had a series of considerable flaws, and corruption in Egypt was seen to be on the rise. "Baksheesh"--a system of monetary favors traded for official and civil service cooperation remains widespread. Egypt is not part of the African Union Convention on Preventing and Combating Corruption or the Organization for Economic Cooperation and Development Anti-Bribery Convention.

In its 2007 Countries at the Crossroads report, Freedom House gave Egypt a remarkably weak average score of 1.72 out of 7.00 in the anti-corruption and transparency category. Egypt ranked 98th (out of 178 countries) in Transparency International’s 2010 Corruption Perceptions Index.

The Mubarak regime also attempted to address inefficiency in fiscal management by reducing subsidies on local energy supplies. But this naturally led to a rise in energy costs, and ultimately served as more motivation for the protests that ended the Mubarak regime. The interim government has pledged to fight corruption. Generals from the Supreme Council for the Armed Forces have issued a law that prevents those found guilty of corruption or graft from taking part in political affairs.

In June 2012, an Egyptian Court sentenced former president Mubarak to life in prison for his role in the deaths of two protesters. Four interior ministry officials and two local security chiefs were acquitted, sparking protests. The court also jailed 12 former oil and gas officials, including former oil minister Samih Fahmi, for their roles in a deal with Israel to supply gas below market value.

Revenue and Expenditure Transparency

Revenue transparency in the Egyptian hydrocarbon sector is limited. Five nationally-owned companies (NOCs) govern hydrocarbon and mineral sectors under the respective authority of the Ministry of Petroleum and the Egyptian Mineral Resources Authority (EMRA) and its production arm, the Egyptian Company for Mineral Resources (ECMR). National contracts with international oil companies (IOCs) are managed by the state hydrocarbon ministry and licenses also require legislative ratification before they can be approved. Despite these measures, there is no requirement to publicize details of contracts while they are moving through the approval process. Contracts with IOCs are reached through open bidding as well as negotiated deals, the latter providing more opportunities for corruption. Egypt does, however, publish NOC contracts and licenses after the fact.

The interim Egyptian government has taken steps to review the oil and natural gas activities of the Mubarak regime. But the challenges are made worse by energy shortages, which bring further attention to the value of such energy contracts. Dissatisfaction over the terms of one controversial Israeli deal has led to multiple bombings of the natural gas pipeline between Israel and Jordan.

A report published jointly by Transparency International and the Revenue Watch Institute notes that, of the major IOCs operating in Egypt, including BP, BG, Eni, INPEX, KPC, Lukoil and Petronas, none provide country-specific information on payments to governments for oil- and gas-related activities. This is in contrast to firms listed in the U.S., which are now required by law to disclose such information.

Egypt’s own Transparency and Integrity Committee (TIC) has offered a frank assessment of the state’s budgetary affairs. In its second report published in 2008, the TIC noted although a number of measures were taken under the Mubarak regime to bring the national budgetary cycle up to international standards, several weak points still exist. In the 2010 Open Budget Survey report, “significant changes” in Egypt's openness of budget data were noted. While Egypt was ranked amongst the worst countries in the 2006 survey, with a score of 19, by 2010 its score to 49: triple the average for the Middle East and North Africa region.

Freedom of Information

The Egyptian constitution includes measures that heavily curtail access to information, despite a legal framework that implies openness in areas such as the proceedings of the People’s Assembly and the judicial system. Prior to the events of January 2011, Egypt had maintained a relatively lively discourse on the importance of access to information. It was one of a few Middle East/North African countries to have debated a freedom of information law. In 2008, Egyptian civil society prepared a counter-draft to the first freedom of information law, advocating for a process focused on the type of information sought rather than on the body or agency holding it. In 2008 Egyptian civil society also worked with civil society from three other countries to create the Arab Freedom of Information Network, and in 2009 held their first regional conference in Cairo.

As Egypt moves to reconstitute its political system, there are a number of draft FOI laws being discussed both publicly and privately. These include a draft FOI law being prepared with the coordination of a World Bank specialist, the interim cabinet’s Information and Decision Support Center (IDSC) and various local civil society efforts. Any new FOI law would likely proceed only after the adoption of the new Egyptian constitution which will presumably offer a clearer view of where information will reside in the new government.